Published by Psaul https://paragraph.com/@publishedbypsaul undefined Tue, 18 Aug 2026 11:23:04 GMT https://validator.w3.org/feed/docs/rss2.html https://github.com/jpmonette/feed en All rights reserved <![CDATA[Age of the Curator]]> https://paragraph.com/@publishedbypsaul/age-of-the-curator 7IIZGih1PTaKmgn5mtcY Tue, 25 Feb 2025 12:55:45 GMT It's been mentioned several times that DeFi is simply speedrunning tradfi. Whereas asset management has origins in ancient Egypt primarily for inventory management and allocation, the bulk of innovation in asset management occurred between 1700 - 1960. Why has asset management grown to the estimated $120T industry it is today and what is its relevance to DeFi? 

This cycle has seen the rawest speculation, from hamster races to FriendTech's social tokens, culminating in the controversial pumpdotfun phenomenon. The vast majority of this conversation has been meaningless. It is also in stark contrast to productive dialogues laying the bedrock of partnerships that underscore what a small, yet influential, cohort understand to be the DeFi Renaissance.   

Background

Protocol tokens and governance tokens are, perhaps, the most prototypical form of tokenised businesses before considering RWAs. Investors typically contrast a protocol’s metrics with its market cap and FDV for a snapshot of its value. This is then tallied or compared against other protocols of a similar kind creating a valuation framework to identify over and undervalued opportunities. According to the commerce institute, 70% of startups fail by year ten and in crypto, 90% of protocols are a bear market away from disappearing. Frankly, the majority of these "frameworks" are useless - and also why many of your degen frens are outperforming VCs. However, the 10-30% that remain can be regarded as good businesses and hence, good investments - depending on the timeframe. The likes of Robert Fleming, John Maynard Keynes, and George Ross Goobey contributed significantly to the field of asset management but they could only do so because there were enough 'good investments' to rebalance a portfolio between. Once enough good investments were available, technological innovation spurred growth. 

When Morpho Blue launched in 2024, it represented similar perspectives from multiple DeFi founders all earmarked by the same theme: modularity. Unlike previous yield aggregators that maintained centralized control over strategies, Morpho's infrastructure empowered granular risk customization. This development captured an ephemeral trend setting off the earliest embers of a DeFi renaissance as modular money markets took precedence over monolithic counterparts. The foundation for efficient asset management in DeFi had been set. Managers could choose from LSTs, LRTs, yield-bearing stables, and other productive assets profiting off the success of their own risk management expertise. Instead of lending markets paying a single risk curator to manage hundreds of parameters, curators earn based on a performance model for managing risk for segments within lending markets. Below we'll see how the technological innovation required to spur DeFi growth has arrived, how the Age of the Curator is firmly underway, and why it is only going to continue. 

The Automation Layer

Curators now play the asset manager role in DeFi. Although plenty of assets currently exist for investment, just as important to an asset manager are the tools available to her. As Morpho trailblazed this field, we now see other protocols adopting the approach to simplify the flow of user funds. This is the key benefit investors enjoy. From degens to experienced investors alike, the decision-making process requires simplicity for effectiveness, and curators are the sophisticated entities whom provide such.

When T. Rowe Price ($1.1T AUM) grew over the 1960s, they hired top research analysts, acquiring the appropriate expertise for their investments. Additionally, this ultimately resulted in a joint venture with Robert Fleming holdings to begin international expansion in 1979. It is the same then as it is now only at a much faster pace. Vaults are rapidly spun up on top of protocols and in collaboration with 2+ entities due to composability and transparency. Now more than ever are users reaping the benefits of real-time risk management. 

Protocols like Baker Fi are consolidating automated strategies within an ERC-20. Minting brETH against ETH deposits to use in recursive strategies with strict risk controls. BakerFi’s strategies only incur losses if stETH experiences a depeg of 10% or more and their backend is configured to monitor the best yields on-chain.

Scalability

By providing the toolset for sophisticated entities to spin up vaults swiftly, users can easily funnel themselves into high yield opportunities. A powerful bootstrapping mechanism and tool for growth. Veda Labs' Boring vault uses merkle proofs and multi-level security for safe rebalancing. After collabs with Ether fi, Lombard, Bedrock, and Rings protocol, Veda raced to a $3b TVL and remain a useful tool for growth purposes. Many of these vaults leverage nimble teams and in this case, Seven Seas Capital.

Euler has onboarded more than 5 governors (their curators) to externalise risk management on behalf of users. After experiencing one of the largest hacks in history, they're back at $240m in deposits at the time of writing. That's over 75% of the deposit value before the hack achieved in under 8 months. Eulers' introduction of Apostro labs onboarded $160m (via Resolvs' USR) in just over 3 months, while their Base deployment tapped veteran experience from Gauntlet to offer competitive rates on a series of blue-chips, introducing another $15m. Risk curators seem to prefer this approach to profitability as more migrate to modular platforms. A tweet from @joooooo5as explains the average Morpho curator earns $5,000 per $1m AUM while Apostro Labs have made no less than $45,000 on their Resolv USR vault alone.

To further demonstrate the magnetism of curators, consider Napier Finance's call for curators. They announced their open approach to collaboration and communicated unique ways their protocol could be leveraged by several actors, catching the attention of Euler DAO. As it stands, Euler DAO is a curator for Napier Finance, allowing them to leverage Euler's entire network of governors to pursue new yield opportunities in fixed yield. There are few reasons why this shouldn't mark a new kind of joint venture and DAO-to-DAO deal—one that inherits the benefits of risk isolation enforced at a protocol level.

Node Infra, a staking provider, also worked with MEV capital to curate a restaking offering using Mellow protocol for a $28m influx to their nodes. 

Code of Conduct & Alignment

The practice of asset management has been instrumental in traditional finance (TradFi). Hedge funds, quant funds, and investment banks consolidate decision-making through rigorous processes into a few steps for end users. Today, asset managers are responsible for more than $120T globally. This demonstrates clear demand, yet finding similar product-market fit (PMF) in decentralized finance (DeFi) is more challenging despite industry positives like the surge in tokenization. Ethical behaviour, moral conduct, and trust remain key components of asset management. Customers typically factor these elements into their decisions alongside fund performance.

For DeFi to cross this chasm, third parties assuming the role of curators should demonstrate a long-term industry outlook aligned with investors' goals. While maintaining ethical practices and embracing transparency with granular risk controls can help, these factors must also be integrated into their strategies. For example, Moonwell entrusted Block Analitica and B.protocol to steward their Morpho vault (reaching $53M ATH within 5 months) due to their track record with MakerDAO—the pioneer of CDP stablecoins with DAI. This inaugural vault helped bootstrap over $150M in Total Value Locked (TVL) for Moonwell after supporting additional assets.

Tokemak's Autopool significantly improves upon their first product through a simplified interface that accepts deposits before rebalancing capital between whitelisted pools. Without token incentives, they have bootstrapped over $80M in autoETH and launched a Balancer version, helping the latter reach $15M at the time of writing. Tokemak's Autopool demonstrates long-term alignment by focusing on sustainability through rigorous internal audits for pool whitelisting and an algorithmic strategy for rebalances that prioritizes loss minimization—all enforced on-chain.

Important context: Tokemak, Block Analitica, and B.protocol have each operated for more than one market cycle (minimum 4 years). All three have successfully stewarded protocols through bear markets, built positive reputations through governance, and effectively managed 8-9 figure investments to implement their on-chain investment approaches.

Trust Minimisation

Between late 2023 and 2025, decentralized application (dapp) user experience has improved dramatically. Users frequently praise the intuitive design of wallets like Phantom and Rabby, while smart accounts have abstracted gas fees by determining both payment sponsors and fee tokens. Platforms like One Balance and Universal X enable users to purchase tokens across more than 20 chains with just a few clicks, making DeFi accessible to millions of users globally.

New account structures now provide granular wallet controls, offering users specific guarantees and effectively programming long-term alignment. For example, Upshift employs its own smart contract wallet infrastructure, designed with enhanced access controls to ensure secure and permissioned interactions with DeFi protocols. This allows sophisticated asset managers to efficiently allocate assets while maintaining full transparency, non-custodial security, and controlled execution within predefined parameters. Upshift has reached $300M TVL in 6 months through collaborations with protocols like Lombard, Kelp, Ethena, and Treehouse, as well as asset managers including MNNC Group, MEV Capital, Ultra Yield Capital, and Tulipa Capital.

Brahma, a DeFi console providing extensive transaction execution management, accumulated $300M TVL in 2024. Their core offering enables users to bundle complex transactions for uniform execution along with automating various workflows. Brahma's stack has become popular among advanced crypto teams due to its programmable security controls over sub-accounts, which are also Safe wallets. In essence, their platform enables operating a crypto-native hedge fund. Recognizing how this complexity complements AI agents, Brahma introduced ConsoleKit—a programmable tool suite allowing developers to create AI agents utilising their entire stack with the same security controls but greater market adaptability.

Considering Castle Capital and Daniele Sesta's essays on DeFAI (Decentralized Finance AI), we can better understand DeFi asset management's maturation. AI agents automating DeFi operations provide the user experience investors seek as demonstrated above: comprehensive analysis for efficient portfolio management (though the AI agent must be specifically programmed) that simplifies decision-making for end users.

On Base, Arcadia Finance announced automated rebalancers in January, enabling automated liquidity management. They use non-custodial 'Accounts' that securely hold users' assets while allowing delegation of rebalancing functions to third parties. These functions can be managed by predictive models and AI agents, or users can leverage rebalancing logic from sophisticated parties like Keyrock.

Modularity as the end game

For DeFi applications, modularity is clearly a preeminent way to address what I will loosely label the application trilemma; balancing security, programmability, and efficiency. Your dApp must be secure, your dApp can't be rigid, and your dApp must minimise capital inefficiency regardless of the ways it could bend, stretch, and compose. Using all of the above examples including Bunni, the honey for DeFi builders now resides in a slightly different direction, which is that of the application/infra hybrids. InfrApps or DeFinfra if you will. It is also worth considering the tension between Uniswap and Ambient finance, and Aave and Euler for how important this development is.

Offering a stack the team is capable of maximising and communicates to developers the design-scape of the infrApp is one of the most lucrative ways an open-source stack can generate revenue. The direction taken at Bunni not only recognises this but provides an unprecedented control over liquidity allowing both niche and mainstream use cases. On a strategic front, we haven't left any user behind and the protocol’s flexibility means we can hone in on any liquidity provider. Shapeshifting allows market-responsive liquidity in the exact manner desired, while ERC 4626s allow an infinite scope for adding yield strategies to a pool. Swap fees and yield. The biggest transaction drivers on any chain. Exactly how it is desired. 

I'll see you at PMF.


~ Thanks to Michael (Euler), Vishwa (Anera), Archer (Tokemak), Max (Upshift), Mario (BakerFi), & 0xMughal (IVX) for their feedback.

]]> publishedbypsaul@newsletter.paragraph.com (Psaul) defi